The Role of Community Colleges in Economic Development

As our economy continues to evolve and change, so too must the vital role a community college plays in its development.  While a community college cannot be all things to all people, it can rise to the challenge of contributing to the vitality of its community through its relationship with business and industry.

Emerging Trends

Since 1994, over 65% of net new jobs created in the US have been at small companies and not at the traditional large (i.e. Fortune 500) employers.  The Office of Advocacy defines a small business as an independent business having fewer than 500 employees.  This trend is evident in our region, as approximately 90% of the customers that the Business and Community Institute (BCI) at Lansing Community College (LCC) serves fall within this definition.

Liquid Web is an outstanding example of an entrepreneurial success story, and reflects this major trend in the US employment picture.  Liquid Web is a Lansing company founded in 1997 with local roots tracing back to Holt High School. Starting from a small office in Holt, the company has grown to three large datacenters. While the leadership at Liquid Web identified a large market need and built a strong business model to serve that need, the company’s fast growth requires an ever-growing demand for workers with technical skills.

As high growth companies, our regional customers rely upon us to continue to deliver fast, flexible and customized services.

Strategic Challenge

A strategic challenge faced by today’s community college, as it relates to economic development, rests squarely on its ability to evolve, and remain relevant to our business community and strategic partners. Our ability to create and deliver services designed to meet the changing needs of our business community is critical to our unique role in economic development.

In order to stimulate real change, we believe the business and community college cultures must be congruent in relation to demand and supply – each needs to understand the other’s particular challenges.

“Planning for the future does not, however, mean that we ignore the present. Times have been tough in Michigan. We have failed to think strategically about the relationship between economic development and talent. Job creators are finding it challenging to grow and develop without the right talent and job seekers are struggling to connect with the right opportunities that leverage their skills. We must commit to addressing these challenges.”   – Governor Rick Snyder

 

The Lansing Community College Position

Lansing Community College has taken on a significant role, and ambitious position in support of our regional economy.  College leadership deserves much credit for supporting strategic, diverse and important initiatives to stimulate our economy – while institutions across the country have taken less assertive positions in support of regional economic development initiatives.

 

LCC’s Alignment with Emerging State Initiatives

Because vibrant communities have healthy and growing regional businesses providing job and income growth, the State of Michigan has adopted a strategy of Economic Gardening.  The basic concept is to focus the state’s economic development efforts on growing existing in-state businesses and jobs, instead of offering tax incentives, etc. to attract out-of-state businesses to bring jobs to Michigan.  This economic gardening model is not unique to Michigan; it is being deployed in many parts of the US where government has realized that “growing your own” jobs makes more sense than trying to lure a major employer to set up shop in your state.

So how does a community college contribute to economic development in congruence with the economic gardening model?   The future success of the US economy will be determined in great part by its ability to support innovation and talent development. Colleges are natural idea factories with their intellectual capital of faculty, staff, and students.  In addition, colleges have untapped relationship capital via their ability to convene leaders and decisions makers in the community.  Economic development benefits from collaboration amongst various stakeholders; central amongst them is the role of the community college.  By investing in programs that support regional businesses, LCC in effect, creates demand for both credit and noncredit education.  Companies will start-up, grow, create and retain jobs, and upgrade skills for their employees. 

“Not only is Michigan’s history rooted in entrepreneurship but its future is tied to it. I have charged MEDC with facilitating training in conjunction with regional Small Business Technology Development Centers.” – Governor Rick Snyder

Amongst other business development initiatives, the regional office of the MI-Small Business & Technology Development Center (SBTDC) at LCC has deep relationships in the local business community through its consulting, training, and market research services. SBTDC annually works with over 2,000 local businesses or prospective entrepreneurs leading to hundreds of jobs created and millions of dollars in new capital formation in our local community.

Goldman Sachs’ 10,000 Small Businesses is an investment to help small businesses create jobs and economic opportunity by providing greater access to business education, financial capital, and business support services. The program is based on the broadly held view of leading experts, that greater access to this combination of education, capital and support services best addresses barriers to growth.

“The Goldman Sachs 10,000 Small Businesses initiative has, in a very short time, infused a dynamic energy that engages community colleges and small business owners in key communities around the nation. These innovative models will ultimately benefit both communities and the nation.”   — Dr. Walter G. Bumphus, president and CEO of the American Association of Community Colleges

The Business & Community Institute (BCI) focuses on talent development for our regional employers.  It is the BCI’s goal to increase the productivity of our regional workforce and boost their competitive advantage both domestically and internationally.  With increased productivity comes long-term sustained profitability, and regional job creation and retention.  Last year, the BCI delivered hundreds of professional development programs to employers and trained almost 3000 members of our regional workforce.

Economic Development Strategic Partnerships

Lansing Community College understands that relationships with the business community and economic development stakeholders are essential, to maintaining our understanding of the marketplace and its value-drivers.  To this end, we are active in our collaboration with for-profit and non-profit organizations that affect our ability to serve the business community. Our continued effort to partner across national, state and local levels is critical to maintaining LCC’s relevance in the marketplace.

Strong partnerships include, but are not limited to:

National – US Small Bus. Admin, US Dept. of Ag., US Dept. of Labor, US Dept. of Ed.

State – Michigan Economic Dev. Corp., Prima Civitas Foundation

Regional – LEAP, Chambers of Comm., CAMW!, Econ. Dev. Corps

Educational – Mich. State Univ., Univ. of Mich., Central Mich. Univ., Kettering Univ.

Trade Associations – Small Business Association of Michigan, MI Manufacturers. Assoc., MI Assoc. of Insurance Agents

 Value of Economic Development Services at Community Colleges

LCC leadership understands the value of creating and maintaining a strong relationship with the business community, and invests in programs to support regional economic development initiatives.  This mutually beneficial relationship yields economic value for industry, as well as increased demand for a higher-educated community.

However, a significant challenge and common misconception by some community colleges across the country is that economic development related “services” are expenses to the college, versus an investment in growing jobs and education.

Hence, placing an over emphasis on financial ROI is an inaccurate and incomplete measure of the value of this nature of strategic investment.  This short-term perspective may ultimately hinder business growth and subsequently, student population.

In support, a study of California community colleges cited that for every dollar spent on economic and workforce development programs at Community Colleges, there is a $12 increase in California’s business income and employee wages.

For Instance

As part of our unique role as an economic development change agent, the following initiatives reflect only a few of Lansing Community Colleges (LCC) non-credit services in support of business and workforce development.

 Through LCC’s involvement with the Michigan New Jobs Training Program, LCC partners with the State of Michigan to enable companies to receive financial assistance for the customized training of new employees. This unique economic incentive allows for businesses to partner with a community to develop training programs that produce highly-trained employees, resulting in a competitive advantage.

Lansing Community College has partnered with General Motors to capitalize upon this economic development initiative.  The General Motors Delta Township expansion included the addition of a new vehicle, as well as an entire third shift of approximately 1300 workers to our region.  The program provided the economic support (training funds) to train new workers in cutting-edge technical skills needed on the plant floors today.

URV Inc. is another example of LCC’s work in this area. URV will collaborate with Oak Ridge National Laboratory, Oak Ridge, Tenn., to develop a new, more cost-effective casting process to produce its large, utility-scale wind turbine components and we will deliver the training.

The “Tech Knowledge E-Pathways” Regional IT Education/Career Pathways Project is a huge win for our region in the area of IT as a result of a grant submitted by Capital Area Michigan Works! , the Capital Area IT Council in partnership with Lansing Community College, and numerous and diverse private and public sector partners. It is critical for any education/career pathway to provide multiple options for program participants to plug into, and advance along a continuum of education/training and employment opportunities, and LCC will be a training partner in this initiative as well.

In Conclusion – Education IS Economic Development

While most community colleges began with a mission to serve the community with low-cost, accessible educational programs, they often found that their mission was tied not only to the academic and educational goals of their students, but also to the health of the community’s economy.

In a May 2011 paper, the Brookings Institute suggests that states in the US, “Identify and target priority clusters and industry sectors critical to regional competitiveness and expansion, promoting partnerships that engage community colleges in economic development.”

Lansing Community College has, and will continue to be a leader in economic development – owning its unique role, because it is not only the right thing to do, but because the return on investment is fundamental and comprehensive.

Solutions

• Community Colleges must be market-driven and more focused on their role in developing the talent pipeline.
• More seamless and focused collaboration between employers, entrepreneur support organizations, and the community college system can positively support the development of demand-driven curricula and programs.
• The future role of community colleges in the economic development system can be enhanced if the community college engages the business community in the decision-making process.

 Questions to consider:

• How can LCC deepen its engagement with the business community?
• How a community college increase its involvement in economic development efforHow can non-traditional learning aid economic developm
• Who else should LCC partner with in economic development efforts?

submitted by Bo Garcia MBA, MPA, Executive Director, Business & Community Institute;  and Tom Donaldson, Certified Business Consultant, Regional Director, MI-SBTDC at Lansing Community College

References

 Snyder, R., (2011).   A Special message from Governor Rick Snyder:  Developing and connecting Michigan’s talent, to Michiganders and the Michigan Legislature., Dec. 1, 2011.  Retrieved from http://www.michiganv/documents/snyder/SpecialMessageonTalent_369995_7

Michigan Association of Community Colleges, (2011).  The Michigan new jobs training program.  Retrieved from http://www.mcca.org/uploads/fckeditor/file/MCCA%20Jobs%20book%20WEB(1).pdf

Michigan Economic Development Corporation, (2011).  Commitment to workforce and training.  Retrieved from http://www.michiganadvantage.org/Commitment-to-Work-Force-and-Training/ – MEDC Commitment to Workforce Training

Michigan Economic Development Corporation, (2011).  Questions and answers. Retrieved from http://www.michiganadvantage.org/New-Business-Taxes-Questions-And-Answers/ 

Kazis, Richard.  “Community Colleges and Regional Recovery: Strategies for State Action.”  brookings.edu. Brookings Intitution, May 2011.  Web.  9 Dec. 2011.

Van Noy, Michelle, et al.  “Noncredit Enrollment in Workforce Education: State Policies and Community College Practices.”  aacc.nche.edu.  American Association of Community Colleges, 30 Sep. 2011.  Web.  9 Dec. 2011.

MacAllum, Keith, et al.  “The 21st-Century Community College.”  ed.gov.  Department of Education, Sep. 2004.  Web.  9 Dec. 2011.

Maher & Maher.  “The Future Role of Community Colleges in Workforce Development.”  mahernet.com.  Sept. 2009.  Web.  9 Dec. 2011.

 

Category: Briefing Papers, Challenges